Market analysis and price spread of major spices through different marketing channels

Abstract:

Spice growers in northern Vietnam frequently receive less than half the price consumers pay, yet the exact magnitude and location of price losses across marketing stages have not been quantified for the Red River Delta region. This research traced the marketing channels and estimated the price spread for five major spices black pepper, star anise, cinnamon, turmeric, and chilli by surveying 180 producers, 45 village traders, 30 wholesalers, 25 commission agents, and 40 retailers across three provinces (Hanoi, Hai Duong, Hung Yen) during January-June 2023. Three distinct channels were identified: Channel I (producer → village trader → wholesaler → retailer → consumer, handling 54.3% of volume), Channel II (producer → commission agent → retailer → consumer, 28.7%), and Channel III (producer → direct sale via wholesale market or cooperative → consumer, 17.0%). The producer's share in the consumer price was lowest in Channel I (average 48.3%) and highest in Channel III (average 74.4%). Cinnamon showed the widest total price spread (62.0% in Channel I), while turmeric had the narrowest (43.2%). Marketing cost accounted for 18-24% of the consumer price; the remainder of the spread was intermediary margin. These results suggest that strengthening direct channels particularly agricultural cooperatives could raise farm-gate returns by 20-26 percentage points.